Archive for the ‘Competitive Strategy’ Category

Microsoft’s Surface and Disruptive Innovation!

October 27, 2012 4 comments

There is an old video with Bill Gates talking about Microsoft and Windows version 3, looking at multimedia, pen computing and an early tablet computer. Circa 1991! The technology shown in the video was forward thinking. Today we take it for granted. This was a time pre-web when only businesses had computers. Few people had computers at home and few knew about email or the Internet.

The idea of tablet computers is not new. Both Microsoft and Apple had looked at the idea years ago, but at the time the technology was not sufficiently fast, sophisticated or useful enough to grasp the majority of consumers’ interests. Techies loved such devices. (At about this time, ago, I had a boss who had a Psion Organiser.  He loved it. Everybody else wondered what he saw in it).

That’s the issue with disruptive innovations.  It’s not just the disruption that counts. It’s the timing. The Microsoft tablet was like the Psion organiser, and even the more tablet like Apple Newton device.

Apple Newton

The idea was a great idea but the timing was too early, and the product was not able to capture the consumer mind.

It’s not the first company that comes out with a disruptive innovation. It’s the first company that captures the consumer’s share of mind – their imagination.

As another technological example, the Apple iPod was not the first mp3 player. There were a few before  (e.g. the MDiamond Rio and the MPMan player) – but they didn’t have the panache of the iPod – and so were quickly overtaken when the iPod entered the scene.

At the same time, entering too late – or basing your product on competitors is also not the way – as Microsoft’s Zune product showed.

The jury is still out on Microsoft’s iPad type product – the Surface. This, at least, is not a copy but something different. To a large degree, it’s fate will depend on Windows 8 (RT). I think the Surface has a place – and I can see it destroying the netbook and low-value laptop market, and so it will be disruptive. I don’t believe that it will damage the iPad or most Android tablets (and also not the Kindle type e-book reader). People buy these for the apps – and there are too few Windows based apps. I don’t see this changing with Windows 8 either. (Why should an apps developer spend time and money building a Windows based app when the vast majority of tablet computers & smart phones are Android or Apple iOS?)

So who will buy the Surface. Techies – obviously! However businesses that currently equip sales people with netbooks or low-price laptops will also go for it as it is lighter, cheaper and trendier while offering the same or greater utility than the netbooks and laptops they had previously bought.

Of course time will tell. That’s what makes something truely disruptive – it’s often only after the new technology has taken over that you can say “but it’s obvious that it would succeed“. If this wasn’t the case – we’d all be flying across the Atlantic on another seemingly disruptive technology that failed to spread even though it provided utility, speed and worked. The supersonic Concorde aircraft never really took off, even though British Airways claimed it was profitable. Only British Airways and Air France flew Concordes. No other airline purchased the aircraft and the Concorde crash in Paris in 2000 effectively sealed its fate.

Great service leads to growth & profits – for Bettys, it’s a piece of cake!

July 9, 2012 1 comment

I recently visited a friend in Leeds – a major city in the North of England. On the Sunday, a group of us travelled the short distance from Leeds to Harrogate, a few miles away. Harrogate is a spa town – you can walk past the “Royal Pump Room” museum  and still smell the sulphur from the spring below. This is just one of several mineral wells containing iron, sulphur and other chemicals that made the town an attraction in the Victorian and earlier Georgian eras.

As well as the spa, Harrogate also features the first Bettys Tea room.

Bettys Tea Room

Bettys was founded in 1919 and has since grown to include a number of other tea rooms across Yorkshire. The family run company now also includes  Taylors of Harrogate, the tea and coffee merchants with brands including the best-selling Yorkshire Tea.

Our visit to Harrogate included a visit to Bettys for morning tea and cakes. We were amazed at the level of service provided.

One friend asked about the orange juice on the menu. “Was it freshly squeezed?” Instead of just acknowledging that it was, we were told that it had been – but not that day, but on the Friday, as it was squeezed off-site and not at weekends. We asked about the ingredients of one of the cream cakes – was it made with butter or margarine and was it suitable for vegetarians? The waitress wasn’t sure – so said she would check in the ingredient listings. It turned out that it was made using butter and was fully vegetarian.  It tasted superb.

I watched our waitress (on the bill it said her name was Jade) – and others. They smiled, they conversed, were friendly, helpful, and their body language showed a real care and attention to each customer.  They knew their products – and if they weren’t sure they didn’t lie or guess, but went to check. The service was impeccable.

It turns out that the superb service is no accident. I asked whether there was any training provided – and was told that each waitress had one-to-one training before starting, and they were expected to learn the menu and were tested. They had an induction phase where they were watched and it took some time before they could graduate to become a full waitress. This training showed – it wasn’t just in product knowledge but also in the whole interaction with the customer, that made our visit such a pleasure. Bettys even has a dedicated website devoted to working for the company at

The results of this focus on excellence show in Bettys financial results. The company consistently makes a profit – and turnover and net worth has grown impressively over the last 5 years. This is despite one of the worst downturns for decades – showing that Bettys has come up with a strategy that seems recession proof. Although profits have not shown the same growth, they’ve remained stable – perhaps reflecting the value offered by the company, compared to competitors. (We paid more for our sub-standard tea on the self-service motorway café journeying up to Leeds).

Bettys shows how important service is for a business, and how appropriate training can lead to top-quality results, and evident staff satisfaction. (In 2007 Bettys was listed in “the 100 best companies to work for” compiled by The Sunday Times). This focus on quality, in the product as well as the product knowledge, attention to detail and customer focus can translate to the bottom-line result – and lead to turnover growth and profits.
Queue outside Bettys, Harrogate
The queues outside, waiting to get into the Tea room is evidence that Bettys is doing something right. The results – financial and reputational are too. It may look like a piece of cake to achieve this – but the numbers of companies that fail to provide adequate service shows that it isn’t. Maybe they should make a visit to Harrogate part of their own staff training!

Analysing weak signals for competitive & marketing intelligence

March 5, 2012 6 comments

I’ve just read an interesting blog post by  Philippe Silberzahn and Milo Jones. The post “Competitive intelligence and strategic surprises: Why monitoring weak signals is not the right approach” looked at the problems of weak signals in competitive intelligence and how even though an organisation may have lots of intelligence, they still get surprised.

Silberzahn and Jones point out that it’s not usually the intelligence that is the problem, but the interpretation of the gathered intelligence. This echoed a statement by Issur Harel, the former head of Mossad responsible for capturing the Nazi war criminal Eichmann. Harel was quoted as saying “We do not deal with certainties. The world of intelligence is the world of probabilities. Getting the information is not usually the most difficult task. What is difficult is putting upon it the right interpretation. Analysis is everything.”

In their post, Silberzahn and Jones argue that more important than monitoring for weak signals, is the need to monitor one’s own assumptions and hypotheses about what is happening in the environment. They give several examples where weak signals were available but still resulted in intelligence failures. Three different types of failure are mentioned:

  • Too much information: the problem faced by the US who had lots of information prior to the Pearl Harbour attack of 7 December 1941,
  • Disinformation, as put out by Osama bin Laden to keep people in a high-state of alert – by dropping clues that “something was about to happen“, when nothing was (and of course keeping silent when it was),
  • “Warning fatigue” (the crying wolf syndrome) where constant repetition of weak signals leads to reinterpretation and discounting of threats, as happened prior the Yom Kippur war.

Their conclusion is that with too much data, you can’t sort the wheat from the chaff, and with too little you make analytical errors. Their solution is that rather than collect data and subsequently analyse it to uncover its meaning you should first come up with hypotheses and use that to drive data collection. They quote Peter Drucker (Management: Tasks, Responsibilities, Practices, 1973) who wrote: “Executives who make effective decisions know that one does not start with facts. One starts with opinions… To get the facts first is impossible. There are no facts unless one has a criterion of relevance.”  and emphasise that “it is hypotheses that must drive data collection”.

Essentially this is part of the philosophy behind the “Key Intelligence Topic” or KIT process – as articulated by Jan Herring and viewed as a key CI technique by many Competitive Intelligence Professionals.

I believe that  KITs are an important part of CI, and it is important to come up with hypotheses on what is happening in the competitive environment, and then test these hypotheses through data collection. However this should not detract from general competitive monitoring, including the collection of weak signals.

The problem is how to interpret and analyse weak signals. Ignoring them or even downplaying them is NOT the solution in my view – and is in fact highly dangerous. Companies with effective intelligence do not get beaten or lose out through known problems but from unknown ones. It’s the unknown that catches the company by surprise, and often it is the weak signals that, in hindsight, give clues to the unknown. In hindsight, their interpretation is obvious. However at the time, the interpretation is often missed, misunderstood, or ignored as unimportant.

There is an approach to analysing weak signals that can help sort the wheat from the chaff. When you have a collection of weak signals don’t treat them all the same. Categorise them.

  • Are they about a known target’s capabilities? Put these in box 1.
  • Are they relating to a target’s strategy? These go into box 2.
  • Do they give clues to a target’s goals or drivers? Place these in box 3.
  • Can the weak signal be linked to assumptions about the environment held by the target? These go into box 4.

Anything else goes into box 5. Box 5 holds the real unknowns – unknown target or topic or subject. You have a signal but don’t know what to link it to.

First look at boxes 1-4 and compare each bit of intelligence to other information.

  1. Does it fit in? If so good. You’ve added to the picture.
  2. If it doesn’t, why not?

Consider the source of the information you have. What’s the chronology? Does the new information suggest a change? If so, what could have caused that change? For this, compare the other 3 boxes to see if there’s any information that backs up the new signal – using the competitor analysis approach sometimes known as 4-corners analysis, to see if other information would help create a picture or hypothesis of what is happening.

If you find nothing, go back and look at the source.

  • Is it old information masquerading as new? If so, you can probably discount it.
  • Is it a complete anomaly – not fitting in with anything else at all? Think why the information became available. Essentially this sort of information is similar to what goes into box 5.
    • Could it be disinformation? If so, what is likely to be the truth? Knowing it may be disinformation may lead to what is being hidden?
    • Or is it misinformation – which can probably be discounted?
    • What about if you can’t tell? Then it suggests another task – to try and identify other intelligence that would provide further detail and help you evaluate the anomaly. Such weak signals then become leads for future intelligence gathering.

With box 5 – try and work out why it is box 5. (It may be that you have information but no target to pin it to, for example – so can’t do the above). As with anomalies, think why the information became available. You may need to come up with a number of hypotheses to explain meaning behind the information. These can sometimes (but not always) be tested.

Silberzahn and Jones mention a problem from Nassim Taleb’s brilliant book “The Black Swan: The Impact of the Highly Improbable“. The problem is how do you stop being like a turkey before Thanksgiving. Prior to Thanksgiving the turkey is regularly fed and given lots and lots of food. Life seems good, until the fateful day, just before Thanksgiving, when the food stops and the slaughterer enters to prepare the turkey for the Thanksgiving meal. For the turkey this is a complete surprise as all the evidence prior to this suggests that everything is going well. Taleb poses the question as to whether a turkey can learn from the events of yesterday what is about to happen tomorrow. Can an unknown future be predicted – and in this case, the answer seems to be no.

For an organisation, this is a major problem as if they are like turkeys, then weak signals become irrelevant. The unknown can destroy them however much information they hold prior to the unforeseen event. As Harel said, the problem is not information but analysis. The wrong analysis means death!

This is where a hypothesis approach comes in – and why hypotheses are needed for competitive intelligence gathering. In the Thanksgiving case, the turkey has lots of consistent information coming in saying “humans provide food”.  The key is to look at the source of the information and try to understand it. In other words:

Information: Humans provide food.
Source: observation that humans give food every day – obtained from multiple reliable sources.

You now need to question the reason or look at the objectives behind this observation. Why was this observation available? Come up with hypotheses that can be used to test the observations and see what matches. Then choose a strategy based on an assessment of risk. In the case of the turkey there are two potential hypotheses:

  1. “humans like me and so feed me” (i.e. humans are nice)
  2. “humans feed me for some other reason” (i.e. humans may not be nice).

Until other information comes in to justify hypothesis 1, hypothesis 2 is the safer one to adopt as even if hypothesis 1 is true, you won’t get hurt by adopting a strategy predicated on hypothesis 2. (You may not eat so much and be called skinny by all the other turkeys near you. However you are less likely to be killed).

This approach can be taken with anomalous information in general, and used to handle weak signals. The problem then becomes not the analysis of information but the quantity. Too much information and you start to drown and can’t categorise it – it’s not a computer job, but a human job. In this case one approach is to do the above with a random sample of information – depending on your confidence needs and the quantity of information. This gets into concepts of sampling theory – which is another topic.

Keeping up standards

December 14, 2011 1 comment

I’ve titled this post “keeping up standards” even though this is exactly what I’ve not been doing. Ages ago I planned to write a post every couple of weeks – or at least monthly. Unfortunately I’ve failed in this aim – not because there hasn’t been a lot to write about: all the changes at Google such as the closing of Google Labs, Google+, changes to Google’s search methods, interface and algorithms; the Online Information Conference I spoke at and the Internet Librarian International conference; the Euro zone crisis; and many other news stories.

I even started a few posts – but never finished them, and my excuse is that paid work has to come before blog posts, and I’ve had more than enough to keep me going since the last post. (Actually it’s been non-stop so I really can’t complain).

What’s prompted this post has been another blog post that set me thinking about how important it is to maintain standards, even in the smallest most trivial areas – such as making a cup of tea.

Keeping up standards is always important – as you want to guarantee the quality of what you produce. With more and more mechanisation this becomes even more important. The old-style tea-lady who would bring around tea or coffee and biscuits has long gone from most businesses. Now, you walk to the dispensing machine and select what you want: cappuccino with extra coffee, tea with double milk (powder) and sugar…

There should be a standard to guarantee the quality of the finished drink. And that brings me to a recent blog post from Neil Infield of the British Library where he describes the British Standard BS 6008 for a cup of tea (See also ISO 3103). I’m not sure that this standard actually relates to tea and coffee machines – but at least it shows that keeping up standards is still important. (Although I don’t think it addresses the detailed minutia of whether your little finger should be pointing out from the handle of the tea cup, or in – and whether a coffee mug is an acceptable receptacle for a good cup of tea?)

One of the ways that businesses stay competitive and remain competitive is by keeping up their standards and continuing to delight their customers. This has to be ongoing – as competitors will continue to try and do the same. Letting your own standards drop or stay static will allow competitors to eventually win out against you.

So keep up standards – and make it your cup of tea to do so.

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